The National Security Agency's failure to respect privacy as a right will serve as a fig leaf for repressive states to force user data to stay within their own borders and crack down on free expression, New York-based HRW said.
"The US now leads in ability for global data capture, but other nations and actors are likely to catch up, and some already insist that more data be kept within their reach," the group writes in its 667-page report examining the state of human rights in more than 90 countries, which was presented in Berlin.
It noted that the US government was "uniquely positioned to monitor global communications" as most of the world's Internet traffic moves "through US territory or companies", and thus bore particular responsibility to safeguard rights.
HRW executive director Kenneth Roth told AFP that countries such as China, Russia and India, the world's most populous democracy, were taking a page from the NSA's playbook in eroding personal protections.
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"The US government, for better or worse, is a trendsetter with respect to Internet privacy and Internet freedom," Roth said in an interview.
"That is going to make it much easier for them to figure out who is saying what on the Internet and to penalise them by censoring... Critical speech."
He said HRW had chosen Berlin to present its annual report because Germany had been a flashpoint of global outrage over fugitive contractor Edward Snowden's revelations of NSA's operations, including the monitoring of Chancellor Angela Merkel's mobile phone.
Claims by US President Barack Obama that the right to privacy was not undermined when the government collects communications, only when it examines them, did not hold water, Roth said.